App workers changing the workspace, and the marketplace

Patrick Anderson Journal Staff Writer patrickanderso_

Saturday

Oct 28, 2017 at 12:00 PM

CRANSTON — Hit the accept button on the app, pick out a cart with steady wheels and start, where you always start, in produce. You have a little less than an hour to buy 20 items — ground beef, French toast sticks, steak sauce, plantains — for a woman who lives down the street.

This isn't a game show, but a job for Instacart, a grocery home delivery service that launched in the Providence area earlier this year and an example of the growing digital gig economy in 2017. Described as an "Uber for groceries" after the ride-hailing app, Instacart connects customers with a roster of freelancers who knock off their shopping list for them and deliver the items right to their door.

"It's better than working behind a counter," said Aline Hunt, a 21-year-old Cranston resident who has been working for Instacart since August, from the shelves of the Price Rite supermarket on Elmwood Avenue.

Instacart is just one of an array of apps and websites changing the way many Rhode Islanders work and buy things.

Thanks to technology, you can now have someone paint your house, get a ride to work, rent your driveway, hire a voice coach or buy a taco all without making a call, leaving your couch or knowing a guy.

While the "gig economy" of spot jobs and contract work has been around about as long as money, the growing universe of app employment seeks to turbocharge it with mobile communication and computer algorithms replacing middlemen and managers. App workers can log 40 hours a week and collect a check all without speaking, emailing or even online chatting with a human supervisor.

Hunt says she only calls the company hotline if something goes wrong.

The labor, time and cost-savings made possible by apps have allowed them to spread part-time gig work into areas of the economy formerly reserved for traditional 9-to-5 shifts while creating markets for goods and services that never existed before.

"On the consumer side, we have turned into an on-demand, give me the lowest price, give it to me tomorrow culture. We have become mercenary," said Brian J. Lamoureux, a faculty member in the Providence College School of Business. "On the supply side, any brand who doesn’t embrace this going to be irrelevant soon. The expectation that a business has to have is, you are in trouble if you are not on the app."

How many Rhode Islanders work for an app? It's difficult to know.

Because app companies don't directly employ workers and instead act as platforms for independent contractors, people who earn money from them don't show up in the payroll-based jobs statistics governments put out each month. (They can show up, to varying degrees, in resident employment-unemployment statistics derived from separate household surveys.)

"Anybody who works for themselves, and technically that is what these people are doing, don't show up in the [Rhode Island-based jobs] numbers," said Donna Murray, assistant director at the Department of Labor and Training. "It doesn't matter that they are getting their jobs from an app."

The app companies are also notoriously secretive with their data and in general don't want to reveal to regulators and competitors how many people are working for them.

Kyle Carnes, Northeast operations manager for Instacart, said that since its launch in July, the app has more than 100 shoppers working in the Providence market. Neither Uber nor Lyft will say how many drivers they have in Rhode Island.

The U.S. Census Bureau does estimate the number of people working for themselves, called "non-establishment employment," which in Rhode Island has risen steadily from 67,499 in 2004 to 76,747 in 2015, the most recent year available.

Of course, how many, if any, of those self employed people are working for apps is unknown.

Many technology companies are creating new ways to make money that wouldn't be possible without the Internet; others are reorganizing some existing markets for traditional contract work.

The latterincludes Thumbtack, an app and website that bills itself as the "Amazon of home services" and tries to link customers to businesses in "nearly 1,000 categories," from general contractors to dog walkers and wedding officiants.

To break through in a market dominated by personal connections and word-of-mouth referrals, Thumbtack is trying to go beyond simple listings to create a system for matching customers with contractors. For instance, it will try to connect you to a house painter, not just give you a list of them.

Fab Goldberg, who runs a catering and personal chef business in Warren, said she uses Thumbtack to find occasional clients during the slow season.

"For me it is an avenue in my downtime to get business without a lot of running around," Goldberg said.

She added that the site has allowed her to reach new markets, such as Boston, and different circles of customers than her usual network.

Working in a totally different area is Providence-based parking rental app Spotter, which is looking to become a kind of Airbnb for underutilized urban driveways.

The app, developed by Brown University graduates, looks to match property owners leaving a parking space empty for the day with someone who needs to park in a particular neighborhood at the same time. In Providence — Spotter's only market right now — the app has several hundred parking spaces for rent in driveways and underutilized off-street private lots.

Albie Brown, CEO of Spotter Parking, said what separates the successful, viral apps from the also-rans is being able to attack a market from both the supply and demand side at the same time.

"It's usually easy to spot a problem in one side of the market, but to figure out the other side of the market distinguishes the ones who have legs," Brown said.

Operating as a technology platform for independent contractors costs less than hiring your own employees with benefits, workers compensation insurance and paid time off.

As a result, when apps move into established industries, the potential for disruption and undercutting often draws alarm from incumbent businesses and workers, as it did when Uber and Lyft first hit the ride-for-hire industry.

More than 16.5 million Americans work in retail trade, so technologies that alter how people shop will effect how many people work.

Will most residents continue to buy things in person, have them delivered through an app or ask their household appliances to order them from an e-retailer for delivery by drone?

"Supermarkets will always have a place for people who want to squeeze the orange — particularly with perishables delivery can be hit or miss," said Providence College's Lamoureux. "But Kleenex and toilet paper. Those kinds of things will be purchased remotely. ... The nature of the workforce will move from customer service to pick, pack and ship."

Along with regular in-person shopping, apps like Instacart compete with a range of online options, including Stop & Shop's venerable Peapod delivery and Walmart offering to deliver orders to be picked up in the store parking lot.

So what's the pay like working for an app?

Carnes said earnings for Instacart shoppers vary widely depending on the market and season, but it is "not crazy to say someone can make in the mid-to-high teens per hour."

That's similar to published reports of what Uber and Lyft drivers make. Website Glassdoor.com estimates Rhode Island average Uber and Lyft income between $30,000 and $36,000 per year. None of the apps withhold taxes, so like other independent contractors, workers get 1099 forms with what they owe at the end of the year.

Of course, unlike traditional hourly employees, a shift working for an app can include as many breaks, diversions and multi-tasking as the worker wants.

"I like being out and about, being flexible and working on other stuff, and seeing my cat," Hunt said.

— panderson@providencejournal.com

(401) 277-7384

On Twitter: @PatrickAnderso_

Never miss a story

Choose the plan that's right for you.
Digital access or digital and print delivery.